How do I use the NLA editor with Linked characters?
Many, many years later ... having just stumbled-upon this never-answered thread .. I think that I can offer a practical solution (based on current software):


Define the "dancing mech," in the library blend-file.
In that same file, place everything – including any armatures, actions, etc. – into a "group," so that external files can reach everything by linking only to that group.
In the external file, link to the "group."  (You will be rewarded with an object that you can, for example, bind to a path with an appropriate constraint, but that you cannot animate or otherwise edit.)
Now, select the group and "Make Proxy."  This will create a new object named "GroupName_proxy."
In the NLA Editor, you should now be able to select the proxy-object, Edit..Insert that object, and insert your NLA actions into that strip.


In Blender parlance, anything that is "linked" (from an external file) cannot be "edited," unless within the current file there is a "proxy" which can capture and therefore contain the changes within this file. Alas, years later, Blender's user interface still falls short in making any of this easy and obvious.